The Members of
Deccan Polypacks Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Deccan Polypacks Limited("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the financial statements")
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial controls relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
Basis for Qualified Opinion
Attention is invited to:
a. Note No. 25 to the Financial Statements regarding preparation and presentation ofthe financial statements on a going concern basis despite suspension of the manufacturingactivities of the Company since July 15 2014.
b. Note No: 28 to the Financial Statements regarding ultimate realisable value ofinventory aggregating to Rs. 21275739/ - which is not moving for more than 3 years.Ultimate impact of the said inventory on the loss for the year and on the reserves as atMarch 31 2017 could be known only upon disposal of the same.
c. Note No: 29 to the Financial Statements regarding trade receivables aggregating toRs. 9736705/- outstanding for a period exceeding four years as on the balance sheetdate. In the absence of confirmation of balance and sufficient and appropriate auditevidence we are unable to comment on the extent of ultimate recoverability of the duesand its impact on the loss for the year on the trade receivables and on the reserves asat March 312017.
d. Note No: 29 to the Financial Statements regarding absence of confirmation ofbalances from companys vendors and customers and their possible impact if any onthe financial statements.
The consequential impact of the above matters on the loss for the year and the retainedearnings as at March 31 2017 is indeterminable
In our opinion except for the effect on the financial statements of the matterdescribed in the basis for qualified opinion paragraph and to the best of our informationand according to the explanations given to us the aforesaid financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 312017 and its loss and its cash flows for the yearended on that date.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies ( Auditors Report ) Order 2016 ( "theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure A a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
2 As required by Section 143(3) of the Act we report that:
a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;
b) in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c) the balance sheet the Statement of Profit and Loss and the cash flow statementdealt by this Report are in agreement with the books of account;
d) in our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
e) On the basis of written representations received from the directors as on 31stMarch 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 from being appointed as a director in terms of Section164 (2) of the Act.
f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure B and
g) with respect to the other matters to be included in the auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us.
i) the company has disclosed the impact of all pending litigations on its financialposition in its financial statements Refer Note 24 to the financial statements;
ii) no provisioning is required under any law or accounting standards for materialforeseeable losses on long term contracts. Further according to the information andexplanations given to us and in our opinion there were no derivative contracts enteredinto by the Company as at March 312017.
iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund.
iv) the Company has provided requisite disclosures in financial statements as to theholdings as well as dealings in Specified Bank Notes during the period from 08thNovember 2016 to 30th December 2016 and these are in accordance with the booksof account maintained by the Company. Refer Note 37 to the financial statements
| ||For M. Bhaskara Rao & CO. |
| ||Chartered Accountants |
| ||Firm Registration No : 000459S |
|Place : Hyderabad ||V K Muralidhar |
| ||Partner |
|Date : 30.05.2017 ||Membership No 201570 |
(Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements section of our report of even date to the members of Deccan PolypacksLimited )
(i) In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) According to the information and explanations given to us the fixed assets havebeen physically verified during the year by the Management in accordance with a programmeof verification which in our opinion provides for physical verification of all fixedassets at reasonable intervals having regard to the size of the Company and the nature oftheir assets. The discrepancies noticed on such verification were not material and havebeen properly dealt within the books of account.
(c) Title deeds of all the immovable properties are held in the name of the company.
(ii) In respect of Inventories
a) The inventories have been physically verified during the year by the management atreasonable intervals. In our opinion the frequency of verification is reasonable.
b) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the inventory records the company is maintaining properrecords. The discrepancies noticed on physical verification of inventory as compared tobook records were not material in relation to the operations of the company and the samehave been properly dealt within the books of account
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies firms limited liability partnershipsor other parties covered in the register maintained under Section 189 of the CompaniesAct 2013 and accordingly paragraph 3(iii) of the Order is not applicable at present.
(iv) According to the information and explanations given to us the company has neithergiven any loans nor made any investments. Accordingly paragraph 3(iv) of the Order is notapplicable at present
(v) According to the information and explanations given to us the Company has notaccepted deposits from the Public. Accordingly paragraph3(v) of the Order is notapplicable to the Company.
(vi) On the basis of records produced to us we are of the opinion that prima facie thecost records and accounts prescribed by the Central Government under Section 148 (1) ofthe Companies Act 2013 have been maintained.
However we are not required to and have not carried out any detailed examination ofsuch accounts and records.
(vii) According to the information and explanations given to us and according to thebooks and records as produced and examined by us in accordance with the generally acceptedauditing practices in India in respect of statutory dues;
a) The Company is generally regular in depositing all undisputed statutory dues exceptprovident fund Income Tax Professional Tax with the appropriate authorities during theyear.
b) There were no undisputed amounts payable in respect of provident fund income taxsales tax service tax customs duty value added tax and cess which were in arrears as atMarch 312017 for a period of more than six months from the date they became payableexcept the following:
|Statute ||Nature of Dues ||Forum where dispute is pending ||Amount Involved |
| || || ||(In Rs.) |
|Sales Tax ||Restriction of set off tax on prorate basis ||Appellate Tribunal A.P. ||360000/- |
viii) According to the information and explanations given to us the company has notdefaulted in repayment of dues to the financial institutions or the banks during the year.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
x) During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India and according tothe information and explanations given to us no material fraud by the Company or on theCompany by its officers or employees has been noticed or reported during the year norhave we been informed of such case by the management.
xi) According to the information and explanations give to us and based on ourexamination of the records of the Company managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act.
xii) According to the information and explanations given to us and based on ourexamination of the records the Company is not a nidhi company. Accordingly paragraph3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him during the year.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934
| ||for M.Bhaskara Rao & Co. |
| ||Chartered Accountants |
| ||Firm Registration No : 000459S |
| ||V K Muralidhar |
|Place : Hyderabad ||Partner |
|Date30.05.2017 ||Membership No 201570 |
Annexure B to the Independent Auditors report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We were engaged to audit the internal financial controls over financial reporting ofDeccan Polypacks Limited ("the Company") as of March 312017 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit conducted in accordance with theGuidance Note on Audit of Internal Financial Controls over Financial Resorting (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013
Because of the matter described in Disclaimer of Opinion paragraph below we were notable to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on internal financial controls system over financial reporting of the Company.
Meaning of Internal Financial Controls over Financial Reporting
A Companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompanys assets that could have a material effect on the financial statements.
Disclaimer of Opinion
According to the information and explanations given to us the company has notdocumented its system of internal financial control over financial reporting on thecriteria based on the essential components of internal control stated in the Guidance Noteon Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.Therefore we are unable to obtain sufficient appropriate audit evidence to express anopinion on the adequacy and operating effectiveness of internal financial controls overfinancial reporting.
We have considered the disclaimer stated above in determining the nature timing andextent of audit tests applied in our audit of the financial statements of the Company andthe disclaimer does not affect or opinion on the financial statements of the Company.
| ||for M Bhaskara Rao & Co. |
| ||Chartered Accountants |
| ||Registration No: 000459S |
| ||VK Muralidhar |
| ||Partner |
|Hyderabad May 302017 ||Membership No: 201570 |